2008-10-14 00:37:04 -

- Fitch Ratings downgrades three of classes of notes issued by Sankaty High Yield Partners II, L.P., and places two classes on Rating Watch Negative.

Due to recent further declines in secondary loan prices, the class D and E over-collateralization (O/C) triggers have been breached. If the O/C breach is not cured within the 15-business-day grace period outlined in

the Indenture, a liquidation of the portfolio could occur. However, the ultimate timing of asset sales is still to be determined, as the manager is contemplating a forbearance agreement with the noteholders and lenders to liquidate the collateral in an orderly fashion.

The following rating actions are effective immediately:

--$347,000,000 class A-1 first senior secured notes remain at 'AAA';

--$28,730,101 senior secured revolving credit facility remain at 'AAA';

--$75,000,000 class A-2 second senior secured notes at 'AA' are placed on Rating Watch Negative;

--$57,000,000 class B third senior secured notes at 'A' are placed on Rating Watch Negative;

--$77,000,000 class C senior subordinated notes are downgraded to 'CCC' from 'BBB';

--$37,500,000 class D subordinated secured notes are downgraded to 'CC' from 'BB';

--$22,500,000 class E junior subordinated secured are downgraded to 'CC' from 'B'.

Additional transaction information and historical data are available on the Fitch Ratings web site at www.fitchratings.com.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

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